Vornado and Pershing Square recently disclosed a 9.9% and 16.5% stake in J.C. Penney respectively. The disclosure recalled the glory days of the Op-co/Prop-co structure and hinted at its return.
One aspect to watch if this transaction progresses is the lease structure between the Op-co and the Prop-co. Given that TIPS just sold with a negative yield - I would expect the lease to be structured with a CPI escalator designed to tap demand for inflation protected investments.
Pershing Square was contemplating a similar structure with Target - creating a single tenant REIT with an inflation protected lease, but the transaction did not materialize.